While sale price is the usual value placed on items, things which are stolen aren't always for sale. So, how do you determine the value to be placed on such items when determining whether a theft should be a misdemeanor (less than $200) or a felony ($200 or more)?

The answer which most courts would reach for would be fair market value. The question then becomes: How do you determine fair market value?

One manner which the courts use a lot is to allow the owner to testify as to value. Generally, the court will presume this is correct. However, this presumption is less sturdy than that of a price tag. The reason for this is obvious. That old, barely running car the victim couldn't sell can suddenly become a classic Chevy worth $20,000. This is a place where a defense attorney can really earn his pay.

Another way to establish market value is to show the price that its equivalent sells for on a resale market. There are a couple ways this can be done. The first is to use some sort of authoritative publication to establish value. The most commonly used of these is the Blue Book, which is used to establish the value of cars. However, there are a number of publications which can be used similarly for comic books, coins, stamps, etc. The second is to bring someone to court who can testify as to resale value. Thus, if someone stole a china set from 1893 a local antique dealer could come to court to testify as to its resale value. The only real difficulty with either method is establishing the condition of the item being evaluated. Here, again, the testimony of the victim is going to be key (assuming the stolen item wasn't recovered).

Sometimes, fair market value is not available. An example of this in Virginia is the case in which the appellate court basically stated that there is no fair market value for a catalytic converter because there is no resale market for catalytic converters in Virginia. In this sort of case, the way that value would most likely be established would be to take the value at time of purchase and subtract wastage from it for each year it has been possessed to determine value. You could probably use the same sort of devaluation found in tax codes for property value over a period of years. I've never had to prove property value in this manner and hopefully never will.

About a week ago, WindyPundit asked how value is proven in theft cases. It's an important question because the value of an item taken is usually determinative as to whether the accused faces a misdemeanor or felony charge.1 For instance, in Virginia if an item stolen is worth $200 or more the accused faces grand larceny charges and up to 20 years in prison. If the stolen item was worth $199.99, or less, the accused will be charged with a misdemeanor carrying a maximum penalty of 12 months in jail.When dealing with something stolen that a business sells, the price the business sells the item for is the value assigned to the item. This has the virtue of being simple to ascertain. On occasion, defendants will argue that the value should be that of the costs the business has in the item and nothing more. However, this founders on the shoals of a couple difficulties.To begin with, actual costs of acquisition or production are hard to determine. If someone steals a shirt from a store at the mall, it's easy to determine the shirt is priced at $40 and that it was bought from the wholesaler for $20. Then start the more difficult questions. How long did the shirt sit on the shelf before it was stolen? In that time, how much money was expended on employees, utilities, rent, security, etc. How much money was spent on even more external things such as regional managers, the national headquarters, the warehouse which stored the shirt before it went to the store, the truck which delivered the shirt to the store, etc. How much of each of these expenses should be assigned to this particular shirt?Of course, all of that would be difficult – or more likely impossible – to determine. At best the prosecution would have to bring an accountant to court every single time there was a felony charge to determine actual value. The proof of valuation part of a trial would take hours upon hours as the accountant went thru and described how a particular value is assigned to each and every particular item.Then there are the costs of lost opportunity. The most obvious of this is the lost profit from the sale. However, this might not be the only opportunity loss. What if the shirt is part of a $300 ensemble? How much in sales does the company lose in addition to the specific items taken? I'm not sure an accountant would be enough to figure all that out. The prosecution might have to bring in an economist.In most cases, Expenses + Opportunity Costs = Price Tag. As well, the courts aren't going to waste all that time on valuation in larceny cases because there are so many of these cases that if it did the entire system would bog down.Tomorrow: What if there is no price tag?

__________1 Usually, but not always. Sometimes just stealing a specific item is a felony. Examples of this would be a credit card, firearm or dog.